Stephen Message, manager of the Old Mutual UK Equity Income fund, has told What Investment this morning that at the current rate of progress shareholders in Lloyds Banking Group can look forward to significant dividend growth by 2017.

Banking giant Barclays delivered results that were some way ahead of expectations this morning, sending the share price lustily upwards and prompting Alastair McCaig, market analyst at stockbroker IG to declare the company ‘the most attractive of the UK banks from an investment point of view right now.’

Whilst Lloyds Banking Group shares have started to pay a dividend; there are two reasons why income investors should be cautious about the prospects for the company, according to Colin Morton, the veteran manager of the Franklin Templeton UK Equity Income fund.

The general deterioration in the oil price, technical problems with its project in Ghana and the elevated levels of debt means that now is the time to sell Tullow Oil shares, according to Sam Wahab, equity analyst at Cantor Fitzgerald.

Eric Moore, co-manager of the £200 million Miton Income fund has revealed for What Investment the reasons why he has begun, as an income investor to dip his toes into the UK banking sector for the first time in many years.

Despite both stocks being presently mired in complication due to the concerns over the oil price, investors who have dividends as their focus should stick with BP and Shell, according to Tim Rees, manager of the Insight UK Equity Income Booster fund.

Dan Hanbury, the experienced and high-performing manager of the River and Mercantile UK Equity Income fund has told What Investment that he believes Lloyd’s Banking Group can grow its dividend significantly in the short-term.

BT is a business that has transformed itself in recent years and is now a tremendous opportunity for income investors, according to Stephen Bailey, manager of the Liontrust Macro Equity Income fund, which has a 4 per cent yield.

Shares in supermarket giant Tesco and banking group RBS have both started to attract the notice of investors looking for value in the UK stock market at present, but at current valuations neither company represents a good investment, according to Paul Stephany, the high performing manager of the £395 million Newton UK Opportunities fund.

Star fund manager Nick Train, whose Finsbury Growth and Income fund is the absolute top performer in the AIC UK Equity Income sector over the past year, has outlined the reasons why he will continue to own Diageo shares, despite what he sees as the huge structural challenges facing the FTSE 100 behemoth.

Richard Buxton, the veteran manager of the £2.2 billion Old Mutual UK Alpha fund, has revealed the reasons why he believes that shares in engineering firm Rolls Royce remain a good investment for the long term, despite the current challenges facing the company.

Henry Dixon, manager of the GLG UK Undervalued Assets fund, which has returned 21 per cent since launch in December 2013, compared to 10 per cent for the average fund in the IA UK All Companies sector in the same time period, has revealed the reasons behind his decision to invest in the troubled and controversial insurance outsourcing company Quindell, before the shares were suspended.

Despite the recent announcements from pharma giant Glaxosmithkline that it is reducing its special dividend and share buyback programme does not change the case for income investors to hold the stock, according to Hugh Yarrow, manager of the Evenlode Income fund, which has a yield of 3.75 per cent.

The perception of Tesco shares (LON:TSCO) does not match the current risks associated with the company and it has a result been a poor investment for many years, according to Colin McLean, manager of the high performing SVM UK Growth fund.

Shares in technology behemoth Apple remain undervalued, despite the enormous gains made by the stock over the course of the past year, according to Ben Rogoff, manager of the Polar capital investment trust.

More from What Investment

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With negotiations ongoing to keep Greece in the euro, David Thorpe considers what a future vote for Britain to leave the EU could mean for your portfolio. As I type these words, uncertainty haunts the streets of Greece, and the possibility of a ‘Grexit’ from the euro has been a shadow over European equity markets for weeks.

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